Ensure to insure: Which travel insurance policies provide Covid-19 coverage?

Many countries with VTL agreements with Singapore require visitors to have travel insurance with Covid-19 medical expense coverage. PHOTO: AFP

SINGAPORE - With the Vaccinated Travel Lane (VTL) agreements paving the way for two-way quarantine-free travel, stir-crazy Singaporeans are dusting off their passports and making up for lost time.

But travel during a global pandemic is fraught with uncertainty, and if travel insurance was a good idea pre-Covid-19, it is practically essential now. In fact, it is literally essential for certain VTL countries such as Malaysia and South Korea, which require foreigners to purchase travel insurance with Covid-19 medical expense coverage as a condition of entry.

Fortunately, the majority of travel insurers now provide Covid-19 coverage, either integrated into the main policy or as an add-on rider.

It is not going to burn a hole in your pocket either. With the various ongoing promotions, coverage can be had for less than $10 a day (see chart on Sample Coverage Of Covid-19 Travel Insurance Policies).

What you need to be covered for

Medical expenses

Assuming you are vaccinated and in good health, any Covid-19 infection should be fairly mild.

However, it is still important to have coverage for Covid-19 medical expenses, whether it is as simple as an outpatient consultation with a doctor or as serious as admission to hospital.

Moreover, some VTL countries require foreigners to buy travel insurance with a specified minimum coverage for Covid-19 medical treatment. You will usually need to present your insurance certificate before boarding the flight.

Emergency medical evacuation

In the event that you contract Covid-19 and your situation deteriorates, doctors may decide that evacuation to Singapore for further treatment is necessary.

This can be a very expensive process. According to examples from insurance company Chubb, medical evacuation via air ambulance can cost upwards of US$100,000 (S$136,700). You will want to ensure your travel policy has adequate coverage in this area.

When choosing your policy, make sure it provides separate coverage for medical expenses and emergency medical evacuation.

For example, MSIG TravelEasy (Standard) provides $65,000 of combined coverage for overseas medical expenses and emergency medical evacuation.

Allianz Travel Insurance (Bronze) provides $1 million of coverage for medical expenses and a separate $1 million of coverage for emergency medical evacuation.

If your situation is serious enough to warrant repatriation to Singapore, you may well have incurred significant overseas medical expenses already, so it is vital you have something left over to cover the evacuation.

Quarantine allowance

If you receive a positive Covid-19 result while overseas and are asymptomatic or mildly symptomatic, the standard procedure in most VTL countries is to self-isolate in a hotel.

The two situations where travellers are most likely to receive a positive Covid-19 result while overseas are:

  • Upon arrival overseas: Assuming the country requires a further Covid-19 test on arrival (most European countries and the United States do not); and
  • Pre-departure to Singapore: All VTL travellers to Singapore must take a Covid-19 antigen rapid test/polymerase chain reaction (PCR) test within two days of departure.

Getting a positive result on arrival is not a great way to start your vacation, but is unlikely to incur much incremental accommodation costs because you can use the hotel already booked for isolation. However, getting a positive result on your pre-departure test could be expensive because you need to book additional accommodation beyond your originally envisioned return date, as you wait for the all-clear.

A quarantine allowance helps defray some of the additional expenses involved. While most policies offer $50 a day, you are strongly advised to top up a little extra for a policy with $100 a day, to cover the cost of a decent hotel. Also, check how many days of quarantine are covered - some policies offer seven days, others 14 days.

Note that quarantine allowances do not cover situations where quarantine is a published requirement for travel. For example, Singapore residents travelling to Indonesia must undergo a 10-day quarantine on arrival. No claims will be allowed in this respect (travel insurance is meant to cover the possibilities, not the certainties).

There is one thing the quarantine allowance will not cover.

The Immigration & Checkpoints Authority has a policy that says travellers who have been diagnosed with Covid-19 in the last 14 days should not travel to Singapore.

Suppose your pre-departure test in Germany is positive and you are issued a seven-day self-isolation order. After seven days, you clear a Covid-19 PCR test and are released.

You can claim a quarantine allowance for the seven-day period indicated on the self-isolation order, but not the additional seven days you need to wait in Germany before returning to Singapore.

Trip cancellation

Many VTL countries require a pre-departure test before leaving Singapore. Should your result come back positive, you will almost certainly need to cancel your trip.

Trip cancellation protection offers reimbursement for forfeiture of deposits or charges that are unrecoverable - for example, flights, hotels and tickets to attractions.

The emphasis is on the word "unrecoverable". You will usually be required to submit proof that you contacted the merchant to request a refund and were denied. If the merchant agrees to refund you a portion of your costs, that portion is not recoverable from your travel insurer.

Travellers stand outside the departure hall at Changi International Airport in Singapore on Dec 2, 2021. PHOTO: AFP

But trip cancellation does not cover situations where you get spooked out of travelling because of quarantine requirements or travel advisories.

Certain travel insurance policies may also provide coverage for trip postponement which, as the name suggests, covers the costs incurred in postponing your trip as opposed to cancelling it.

What you should know about Covid-19 coverage

Coverage applies to overseas expenses

With the exception of trip cancellation or postponement, travel insurance is generally meant to cover you for things that happen outside of Singapore.

In other words, if you require overseas medical treatment for a Covid-19 infection diagnosed in Britain, you can file a claim with your travel insurer.

But if you are diagnosed with Covid-19 after returning to Singapore from Britain, you need to file a claim with your regular health insurance provider for medical treatment received in Singapore.

While the Singapore Government is currently picking up the tab for Covid-19 medical bills for fully vaccinated Singaporeans, permanent residents and long-term pass holders, an exception applies to those who test positive for Covid-19 within 14 days of their arrival in Singapore.

However, these individuals will still be able to tap government subsidies and insurance coverage where applicable. According to the Ministry of Health, the median acute hospital bill for patients who end up in the intensive care unit and require Covid-19 therapeutics is $25,000, although means-tested government subsidies and MediShield Life coverage can reduce the bill to about $2,000 to $4,000 for eligible Singaporeans in subsidised wards.

Covid-19 coverage will be less than general coverage

While travel insurance policies may offer very generous coverage of overseas medical expenses, Covid-19 treatment is usually a much smaller amount.

For example, AXA SmartTraveller offers up to $600,000 of overseas medical expenses, but only up to $150,000 for those specifically related to Covid-19.

I can only surmise that it is because Covid-19 is a relatively novel disease and underwriters prefer to err on the side of caution by limiting their liability.

    Mandatory quarantine is not grounds for cancellation

    If there is one thing the Omicron variant has done, it is remind people that border restrictions and quarantine requirements are liable to change at short notice.

    In recent weeks, for example, Sydney and Melbourne have imposed 72-hour quarantine for all international arrivals, and India reinstated seven-day home quarantine for travellers from Singapore. While both these measures have since been lifted, they are reminders of how fast things can change.

    As inconvenient as these things may be, changing regulations, government advisories against travel and border closures are generally not grounds to claim trip cancellation.

    Most policies will cover only trip cancellation if you, a travelling companion or family member test positive for Covid-19 prior to departure.

    To put it another way, while it is unfortunate you need to spend precious overseas time in quarantine, that is not really the insurer's concern.

    If you want a policy that covers such situations, you might want to consider Aviva's travel insurance and its "cancel for any reason" clause.

    This covers 50 per cent of your unrecoverable travel and entertainment costs (capped at $5,000) should you decide not to travel, claimable a maximum of once per period of insurance (that is, annual policy-holders can use it only once).

    Travel insurance policies with Covid-19 coverage

    Travel insurance policies have different tiers and coverage. The chart, Illustrative Pricing For Travel Insurance Policies, uses a seven-day trip to South Korea as the basis for comparison.

      My advice would be to look for an insurer that provides coverage for all four areas discussed previously (some policies do not provide quarantine allowance).

      Generally, there is no harm in purchasing travel insurance well in advance of your trip, since you are charged only for the days overseas.

      For example, an insurance company charges the same for a seven-day trip to South Korea whether you buy it the day before departure or a month in advance. But buying it earlier means you will be covered for specified events that occur in the pre-departure period, such as a positive Covid-19 diagnosis.

      Should you eventually decide not to travel, most Singapore-based insurers allow you to cancel and refund your policy, provided no claims have been made. Some may charge an administrative fee.

      Other travel insurance options

      From airlines

      Instead of purchasing travel insurance from a bank or underwriter directly, passengers flying on certain airlines can purchase or enjoy complimentary travel insurance with Covid-19 coverage.

      For example, passengers flying with Singapore Airlines can purchase a policy underwritten by Allianz, which provides up to $1 million of overseas Covid-19 medical expense coverage and trip interruption coverage of up to $150 a day that would cover additional costs incurred due to quarantine.

        SilkAir and SIA aeroplanes parked in airside at Changi Airport on Dec 17, 2021. ST PHOTO: LIM YAOHUI

        Likewise, those flying with Scoot can buy a policy underwritten by AXA with $10,000 of overseas Covid-19 medical expense coverage and a daily quarantine allowance of $100. But do note that the relatively low medical coverage will make this unsuitable for certain VTL countries such as Malaysia or Thailand.

        Passengers flying on Cathay Pacific, Emirates and Etihad will also enjoy complimentary Covid-19 medical insurance, with no action needed from them.

        From overseas

        Travellers can also consider purchasing insurance from overseas companies such as SafetyWing and World Nomads. These policies provide coverage for Singapore residents and may be more cost- effective in certain scenarios.

        However, it is important to read up on both the seller and underwriter, since you will not have access to mediation bodies like FIDReC in the event of a dispute.

        In a nutshell

        Remember that travel insurance provides no coverage should your trip be impacted by new quarantine requirements and even border closures. Likewise, there is no coverage against a disinclination to travel, so if you are still on the fence, it is a good idea to hold your fire on any non-refundable bookings.

        Venturing overseas without travel insurance was always a foolhardy endeavour prior to Covid-19 and to do so now is borderline insanity.

        Do not pinch pennies when it comes to protection - no one ever enjoyed a mai tai on the beach while looking over his or her shoulder.

        • Aaron Wong founded The MileLion (milelion.com) to help people travel better for less and impress relatives during Chinese New Year. He was 50 per cent successful.
        • A version of this story was published in The MileLion.

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